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Wed, Aug 25, 2010 - Page 10 News List

Potash producer looks for buys other than BHP

RIVALSSpeculation has focused on a deal with Rio Tinto, also from Australia, and Vale, the Brazilian company that is a leading producer of iron ore

NEW YORK TIMES NEWS SERVICE , NEW YORK

The Potash Corp of Saskatchewan, the fertilizer producer, confirmed on Monday that it was seeking bids to counter an unsolicited US$38.6 billion offer from BHP Billiton, the Australian mining company.

William Doyle, chief executive of Potash, said in an interview that his company had entered preliminary talks with other companies some time ago in anticipation of a bid from BHP.

“We’re not starting from zero,” Doyle said. “We’ve had a tremendous outflow of people looking to do something with us.”

The announcement of negotiations followed the decision by the directors of Potash to reject the bid from BHP, which values the company at US$130 a share, for a second time.

As was the case when Potash first revealed the bid from BHP last week, Doyle dismissed it as an attempt to exploit a decline in shareholder value that was tied to the recession.

He declined, however, to specify what price could sway the Potash board.

Which companies Potash is in talks with, and what sort of arrangements were being discussed, remained unclear.

Speculation has focused on BHP’s two rivals in the mining community: Rio Tinto, which is also from Australia, and Vale, the Brazilian company that is a leading producer of iron ore. Since China is the world’s largest importer of potash, some analysts also say they believe that a Chinese state-owned company may bid for Potash.

However, Doyle suggested in the interview that a broader range of companies is at least having a look at Potash.

“You should not limit your imagination as to what sectors they are from,” he said.

Vale denied it was one of the companies.

“Rumors about a bid to acquire a fertilizer company or about negotiations with the purpose of making a bid to acquire such company are totally unfounded,” the company said in a regulatory filing.

A spokesman for BHP declined to comment.

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